Before we jump off the deep-end, I noted following the higher than expected employment data that Australian employment from month-to-month is volatile and should be taken with a grain of salt. I have witnessed a gain of 70,000 one month followed by a loss of 20,000 the next. Furthermore, wage growth is rapidly contracting.
Traders watch central banks fumbling with whether to continue on a path to ease or not. The Reserve Bank of New Zealand (RBNZ) increased their key benchmark by 100 bps on a series of strong, albeit short-lived, data only to reverse course in less than a year’s time.
AUDUSD is trading within a on the 4H chart leading into the RBA policy minutes on Monday. If the RBA can hold off on further easing, the pair could set up for a potential near-term trend break.
Near-term resistance is located at .7163 and .7217, while if the RBA hints at further easing, AUDUSD could continue its path lower .7070. The week is chalk full of U.S. data, which could aid the Aussie dollar in either direction. If U.S. data is weak enough and triggers greenback selling, the pair could achieve near-term resistance targets.
Moving average activity is looking like it is setting up for a 20/50-EMA convergence, but until then they are merely minor support levels.
Intraday momentum, as measured by the , is rather weak at 14. The +/- DMI is suggesting price action is still there, but the RBA could quickly jawbone a change.
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